“On the critical security challenge of Iran's nuclear programme, you can see habbits of cooperation paying off,” Clinton said ahead of the 3rd US-India Strategic Dialogue being held here.

Addressing the media, Clinton added, “US appreciates that India has made it clear it understands the importance of denying Iran a nuclear weapon and supports efforts to ensure Iran's compliance with international obligations”.

The comments came a day after US exempted India and six other countries from tough new financial sanctions on Iran's oil trade citing significant reduction in imports of Iranian oil by them.

“India has taken steps to diversity its sources of imported crude by reducing dependence on Iranian oil, fact that I officially reported to our Congress. “US recognises India's growing energy needs and we are working together to ensure not only stable oil markets but additional areas of cooperation to help India attain greater energy security,” she said.

Crude imports from Iran have a steadily declining share in India's total oil imports - dropping from a level of over 16 per cent in 2008-09 to almost 10 per cent in 2011-12. Last month, the US sent a team of its energy experts to help India reduce its dependence on Iranian oil.

While Western countries have accused Iran of pursuing a clandestine nuclear weapons programme, Tehran says the technology is for peaceful energy needs.

Reacting to US decision of exempting it from economic sanctions for cutting the oil imports from Iran, India had downplayed it saying it was a “decision taken by the Obama Administration under its domestic law.”

“We have seen the US notification exempting Indian financial institutions from the application of the provisions of US domestic law for energy-related transactions with Iranian Central Bank and other financial institutions designated by US Government.

“This is a decision taken by the US Government under its domestic law,” External Affairs Ministry spokesperson Syed Akbaruddin had said yesterday in New Delhi.